Community Development Innovation Review

March 2014

Integrating Energy Efficiency into Mortgage Financing: Promising Efforts in the New York City Multifamily Building Sector


When McKinsey & Company first released its global cost curve for greenhouse gas abatement in 2007, proponents of energy-efficient retrofits of buildings rejoiced. Here was a respected analytical framework that supported what they understood intuitively: that simple, tried-and-true measures associated with building retrofits could be implemented at net-present value “negative cost.” In other words, using relatively mundane technologies (such as insulation, air sealing, efficient boilers) would not only reduce carbon emissions but would pay for themselves in savings over time. At least one aspect of the massive greenhouse gas reduction challenge appeared to be easy low-hanging fruit. Unfortunately, this fruit has not been as low-hanging as policy wonks once thought. Market demand has yet to propel energy efficiency into the mainstream, and the reasons for its limited uptake are as myriad as the types of buildings that make up the potential retrofit marketplace. From the vantage point of Deutsche Bank’s community development activities, we see some promising initiatives that treat energy efficiency upgrades not as a separate, stand-alone transaction, but as a component in existing transactional frameworks, namely the multifamily mortgage refinancing process.

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Other articles in this issue

Mixing Asset Building with Energy Efficiency: A Recipe for Financial and Environmental Sustainability

The Future of the Clean (Green) Economy

Cleaner Energy and Health: Household, Local and Global Benefits

Financing Energy Efficiency Retrofits of Affordable Multifamily Buildings

Manufactured Homes Help Both Save the Planet and Save Money for Low-Income Owners

Utilities and Community Developers Partner to Improve the Energy Efficiency of Affordable Rental Housing Nationwide

Home Energy Efficiency and Mortgage Risks: An Extended Abstract

Charter Schools Ripe for Green Investments

Financing Energy Efficiency in Low-Income Multifamily Rental Housing: A Progress Update from the Low Income Investment Fund

Neighborhood Health: A New Framework for Investing in Sustainable Communities

Bringing Down Green Financing Costs: How a State-sponsored Bank Might be the Key

Understanding the True Benefits of both Energy Efficiency and Job Creation

Can Cities Lead the Way in Innovative Energy Retrofits for Single-Family Homes?

Lenders’ Property Standards and Energy Efficiency: The Vital Link for Affordable Housing

Energy to Heal: Health Care, Climate Change, and Community Resilience